MedPAC is out with its 15th annual mid-year report, offering advice for Congress and the Department of Health and Human Services to improve and sustain the senior's health program as it enrolls millions of retiring baby boomers.
With the Medicare Trust Fund slated to run dry by 2026, as of most recent projections, and years of policy analysis documenting problems with the status quo, MedPAC is hoping to start a conversation about new reforms, particularly for payment policies.
"This report represents the beginning of a dialogue within MedPAC about how Medicare's policies across FFS, (Medicare Advantage), and ACOs might evolve and how these differing policies might affect beneficiaries, providers, and taxpayers," said MedPAC Chairman Glenn Hackbarth in a media release.
Here's what hospitals need to know about MedPAC's latest thinking:
Synchronizing Medicare policy across payment models
A "major issue" with Medicare is that payment rules and incentives are different and inconsistent across the three main payment models, fee-for-service, Medicare Advantage and accountable care organizations, the commission wrote in its report.
To address the inconsistencies and set the stage for synchronizing payments across the payment models, MedPAC is considering the feasibility of setting a common spending benchmark for Medicare Advantage plans and ACOs that would be tied to local FSS spending.
This is the first time MedPAC has considered ways to synchronize the three payment systems; the analysis isn't intended to be comprehensive and "no single payment model is uniformly less costly than another model in all markets across the country," the commission wrote. But the common spending benchmark idea could pave the way for an approach that is financially neutral to organizations serving all three programs, while keeping the process simple for seniors.
Improving risk adjustment
Risk adjustment using hierarchical condition categories is currently used as a way to have Medicare's payments hew to the expected costs of beneficiaries – but the model is not perfect. According to MedPAC, other models of risk adjustment are not perfect either, and it may be that administrative changes could both improve the accuracy of cost projections and neutralize incentives. One possibility for Medicare Advantage, MedPAC suggests, "is penalties for disenrollment of high-cost beneficiaries."
Reevaluating current approaches to measuring the quality of care
Today's quality measures "are overly process oriented, too numerous, may not track well to health outcomes, and are a burden on providers," MedPAC wrote in its report. For example, a new study found that the recommended quality guideline for preoperative use of beta-blockers in patients undergoing coronary artery bypass grafting surgery is not associated with better outcomes.
MedPAC wants to set up a framework for simplifying quality measures, including phasing out those without sufficient evidence, and create a system to compare quality within localities.
Aligning financial assistance policies for low-income beneficiaries
Changing income eligibility for the Medicare Savings Programs could help low-income seniors better afford out-of-pocket costs under a redesigned Medicare FFS benefit package, MedPAC wrote. Reiterating a suggestion made in 2008, the commission thinks that Congress should align eligibility for the Part B savings program with the Part D low-income drug subsidy criteria and extend Part B premium subsidies to beneficiaries with incomes of up to 150 percent of the federal poverty level.
Paying for primary care with per beneficiary payments
The current FFS-based primary care bonus program expires in 2015. MedPAC suggests continuing additional payments to primary care practitioners, but in the form of a per-beneficiary payment. Long-term, the commission argues that the Medicare physician fee schedule "must be rebalanced to achieve greater equity of payments between primary care and other specialties." MedPAC would like to see the SGR replaced with a 10-year "path of legislated updates" that would include higher payments for primary care services over 10 years and then frozen and a reduction of non-primary care service fees by (at most) 3 percent in each of the first three years and then frozen.
Payment differences across post-acute settings
With Medicare's payment rates often varying in reimbursement for treatment of similar patients in different settings, MedPAC thinks it could be feasible to pay inpatient rehab hospitals the same rates as skilled nursing facilities for patients with certain conditions, including patients receiving rehabilitation therapy after a stroke, major joint replacement and hip and femur procedures (such as hip fractures).
Medication adherence and medical spending
Greater medication adherence has been shown to improve outcomes and lower overall health spending in some cases, but studies indicate variability, with the beneficial effects depending on a number of factors, including the overall health status of patients and study methods. However, since more medication adherence also means more drug spending, the commission wants to make sure medication adherence outreach efforts don't produce unintended consequences.